AT&T customers surprised by 'unlimited’ data limit

Mike Trang likes to use his iPhone 4 as a GPS device, helping him get around in his job. Now and then, his younger cousins get a hold of it and play some YouTube videos and games.

But in the past few weeks, there has been none of that, because AT&T put a virtual wheel clamp on his phone. Web pages wouldn't load, and maps wouldn't render. Forget about YouTube videos – Trang's data speeds were reduced to dial-up levels.

So last month, AT&T "throttled" Trang's iPhone, slowing downloads by roughly 99 percent. That means a Web page that would normally take a second to load instead took almost two minutes.

AT&T has some 17 million customers with "unlimited data" plans that can be subject to throttling, representing just under half of its smartphone users. It stopped signing up new customers for those plans in 2010 and warned last year that it would start slowing speeds for people who consume the most data.

What's surprising people like Trang is how little data use it takes to reach that level – sometimes less than AT&T gives people on its "limited" plans.

Trang's iPhone was throttled just two weeks into his billing cycle, after he'd consumed 2.3 gigabytes of data. He pays $30 per month for "unlimited" data. Meanwhile, Dallas-based AT&T now sells a limited, or "tiered," plan that provides 3 gigabytes of data for the same price.

Users report that if they call the company to ask or complain about the throttling, AT&T customer support representatives suggest they switch to the limited plan.

"They're coaxing you toward the tiered plan," said Gregory Tallman in Hopatcong, N.J. He hasn't had his iPhone 4S throttled yet, but he's gotten text messages from AT&T warning that he's approaching the limit. This came after he had used just 1.5 gigabytes of data in that billing cycle.

John Cozen, a Web and mobile applications designer in San Diego, hasn't been throttled yet either, but he's been so disturbed by a warning that he's "almost scared to use the phone," he said. Complaining to AT&T got him nowhere, and now he's looking to switch to another carrier.

"I don't think two to three gigabytes is an exorbitant amount," he said. "Really, I'm just looking at pictures and text once in a while."

AT&T spokesman Mark Siegel said that as of last summer, the top 5 percent of data users were using 2 gigabytes of data per month. But he also said the company doesn't actually throttle all of the top 5 percent "unlimited" data users. Last month, the figure was only 0.5 percent, or about 200,000 people, he said.

That's because AT&T only throttles users in areas where the wireless network is congested that month, Siegel said.

Siegel also pointed out that aside from moving to a tiered plan, "unlimited" plan users on the cusp of being throttled can use one of AT&T's 30,000 Wi-Fi hotspots, where usage is unmetered.

The unlimited plan worked fine for AT&T a few years ago, when the iPhone was new. The company had ample capacity on its network and wanted to lure customers with the peace of mind offered by unlimited plans. Now, a majority of AT&T subscribers on contract-based plans have smartphones, and the proportion is growing every month. That's putting a big load on AT&T's network.

The limited data plans force subscribers to keep an eye on their usage so they don't overwhelm AT&T's network. Verizon Wireless has adopted similar plans. But the two companies differ in how they manage their remaining "unlimited" subscribers.

Verizon doesn't slow down the "5 percent" unless the cell tower their phone is connected to is congested at that moment and it slows them down by the minimum amount necessary. By contrast, once AT&T has decided to throttle your phone, it will be slow for the rest of the billing cycle, even if it's 3 a.m. and there are no other cell phones competing for the capacity of that particular cell tower.

Verizon's measures have drawn few complaints, and indeed, may have gone unnoticed even by the "5 percent."

T-Mobile USA is upfront about the level it starts throttling at: 5 gigabytes. AT&T subscribers have no idea if they might be among the top 5 percent until they get the warning, which is soon followed by throttled service. While Trang was throttled at 2.3 gigabytes, he knows other iPhone owners who are using 5 or 6 gigabytes per month with impunity.

"It seems very random," Trang said.

Sprint Nextel is hanging on to unlimited data plans without throttling, alone among the "Big Four" national wireless carriers.

Tallman sees few prospects for a lawsuit against AT&T. The company is still providing unlimited data usage to throttled customers, even if the speeds are so low as to make the phone useless for anything but phone calls and text messages. The company made no promises that "unlimited" data would always be coupled with high speeds, he notes.

"They just guaranteed the highway. They didn't guarantee the speed limit," he said.